Sunday, December 23, 2012

Socialism:  Lubos Motl, a young Czech astrophysicist, nails it

Today, the Japanese voters ended a ludicrous 3-year-long experiment with the left-wing politicians at the top that began in 2009, after decades of right-wing governments that were able to rebuild Japan after the loss in the world war and bring its economy to the #2 spot.

Shinzo Abe of the LDP will return to the chair of the prime minister; the DPJ socialists have lost approximately 3/4 of their seats gained in 2009. The voters realized that the leftists emit lots of big words and promises but they're just dirty lies. Of course, the leftists faced some event they couldn't quite have influenced – e.g. the tsunami or the fact that China surpassed Japan as the world's #2 economy (probably a coincidence) but it's clear they were bringing nothing good to the country.

Meanwhile, France has a left-wing government that codified a breathtaking 75 percent tax rate for the rich that should come into force in 2 weeks. Now, would you be pleased to work hard and pay 75 percent of your income to a group of dirty gangsters who call themselves the government? If you would, you are a psychopath; it's a kind of a psychiatric disorder that many other people may support you in having – for various not too mysterious reasons – but that doesn't change anything about the fact that you're profoundly sick. ;-)

Needless to say, there are many mentally healthy people among the wealthy Frenchmen. And you have heard their names. Many famous people moved out of France. They include Asterix and Obelix. The first one, Gerard Depardieu, moved to a Belgian town right behind the borders where he pays no taxes designed for the rich. The latter, Christian Clavier, moved to London.

Karl Lagerfeld, the German creative director of French Chanel, has informed Mr Hollande that he (Hollande) was an idiot. It's clearly not a terribly original insight but it may still be important for Mr Hollande to memorize it at this stage. Alain Delon is leaving the country to become a resident elsewhere, too. The same is true about Johnny Hallyday, a singer. Well, that's quite a brain drain, or clown drain or whatever is the appropriate term. ;-)

All of us understand what's going on and we don't have to use too strong words. On the other hand, it's still interesting to ask whether these transfers are too different from what we have known as emigration in the socialist bloc. Hundreds of thousands of Czechoslovaks have escaped the communist country since the coup since 1948 – for reasons that were always a mixture of political ones and economic ones. Of course, their separation from the homeland was "more irreversible" – although it turned out to be reversible in many cases, after all – than it is in the case of the French actors who may still visit France.

However, the "motivation side" of their decision isn't too different. France is currently led by imbeciles representing jealous losers who either don't have a clue how wealth is produced or they have a clue but they dream about "maliciously screwing the rich", anyway. They either don't understand that the policies will chase a part of the elite out of country and reduce the investment and production in the country (including the birth of culture) in general; or they don't mind. I don't know which of those is more typical and which of them is more justifiable and I don't really care; it wouldn't change my verdict on these individuals (or, more precisely, mobs; I mean those that brought Hollande to the power) much.

The Depardieu case is the most interactive one. He has upped the ante in his battle when he threatened (or announced?) to return the French passport. This is really getting closer to the stories of the emigrants from the communist bloc. He has offered his explanation through the media. He says that he has worked hard as a printer before he became an actor. He always paid all his taxes, fulfilled all duties, loved the French nation, but now he's so insulted that there are no doubts about his next steps.

In 2012, he paid a 85% tax on his income. Whatever he exactly counts, it is just insane. In the last 45 years, he has paid 145 million in taxes. Wow. Now, he's going to be a true European, free cosmopolitan citizen.

The prime minister of France has called Depardieu "pathetic" and "unpatriotic" because, the prime minister believes, "to pay taxes is a patriotic act". Holy cow, please give me a break with these pathetic pomposities; paying taxes is always just a necessary, enforced evil, not a reason to celebrate; and a government forcing citizens to do obviously unpleasant things and hide their unhappiness at the same moment is intrinsically an authoritarian government. At Harvard, I was paying at most 25% which is much less than 75% but it did make me somewhat angry about the organized thieves at the IRS and Mass DOR, anyway (especially because of the combination with the insane bureaucracy and permanent retroactive harassment linked to previous returns).

Depardieu vows to remain polite but asks the prime minister: Who are you? I join Mr Depardieu. Who is the French prime minister? I have never written down his name (because I don't remember what it is, even though I could have been looking at it just 10 seconds ago) and I wouldn't recognize his face. I can recognize Mr Depardieu but not the current French prime minister.

Could the French prime minister please fully exploit the opportunity to shut his arrogant socialist mouth up (or down, whatever is more appropriate)? And to adjust his behavior according to his being the ultimate embarrassing socialist zero that the prime minister undoubtedly is? He hasn't contributed 1% of the things (or paid 1% of the taxes) to France or the world that Mr Depardieu has. Still, he seems to believe that he has not only the right to steal most of the income from Mr Depardieu but even to be unbelievably arrogant towards Mr Depardieu.

The prime minister's behavior is what many people have called the "arrogance of power". It may sound a bit intimidating when the prime minister of the country where you live calls you "pathetic" just because you don't want to do something that no sane person would want to do – to pay 75% taxes.


Lubos doesn't like global warming much, either


Race politics fails ordinary blacks


JoAnn Watson, Detroit city council member, said, "Our people in an overwhelming way supported the re-election of this president, and there ought to be a quid pro quo." In other words, President Obama should send the nearly bankrupted city of Detroit millions in taxpayer bailout money. But there's a painful lesson to be learned from decades of political hustling and counsel by intellectuals and urban experts.

In 1960, Detroit's population was 1.6 million. Blacks were 29 percent, and whites were 70 percent. Today, Detroit's population has fallen precipitously to 707,000, of which blacks are 84 percent and whites 8 percent. Much of the city's decline began with the election of Coleman Young, Detroit's first black mayor and mayor for five terms, who engaged in political favoritism to blacks and tax policies against higher income, mostly white people. Young's successors, Dennis Archer and Kwame Kilpatrick, followed his Third World tyrant policies, but neither had his verbal vulgarity. Kilpatrick (2002-2008) went to jail and is on trial today on charges of corruption. Mayor David Bing is making an effort to revive Detroit. His problem is that he's not God.

Policies that ran whites and other more affluent people out of Detroit might have been Young's and his successors' strategy. After all, why not get rid of people who aren't going to vote for you anyway? The problem is that getting rid of these people left Detroit with a lower tax base, fewer jobs and fewer consumers. Fewer whites might be good for the careers of black politicians, but it's not in the best interests of ordinary blacks. Blacks have political control of Detroit, but the relevant question is whether some control of something is better than 100 percent control of nothing. By most measures, Detroit is one of the nation's most tragic cities, and it's mostly self-imposed.

Detroit topped Forbes magazine's 2010 list of America's Most Dangerous Cities. That year there were 345 homicides, but that's going to be topped with this year's 365 homicides so far. Most homicide victims in Detroit and elsewhere are black, and 95 percent of the time their murderers are black. But far more important to black leaders and white liberals than blacks murdering blacks are charges of police misconduct and racial profiling.

Detroit's predominantly black public schools are close to being the worst in the nation, perhaps with the exception of those of Washington, D.C. Only 4 percent of Detroit's eighth-graders scored proficient or above on the most recent National Assessment of Education Progress (NAEP) test, sometimes called "The Nation's Report Card." Thirty-six percent scored basic, and 57 percent below basic. "Below basic" is when a student is unable to demonstrate even partial mastery of knowledge and skills fundamental for proficient work at their grade level. "Basic" indicates only partial mastery.

Unbeknownst to most black parents is the fact that most black students who manage to graduate from high school cannot read and compute any better than whites four years younger and still in junior high school. Here's a question for you: If we put a group of 100 students of any race having an eighth-grade level of proficiency and another group of 100 students of any race with a 12th-grade level of proficiency in college, is it reasonable to expect the first group to perform as well as the second? On top of that, is it reasonable to expect a student of any race to be able to make up 12 years of fraudulent K-12 education in the space of four or five years of college?

Detroit's social pathology is seen in other cities with large black populations such as Philadelphia, Newark, Baltimore and Chicago.

These are cities where blacks have for years dominated the political machinery in the forms of mayors, police chiefs, superintendents of schools and city councilmen, plus they've been Democrats. It's safe to conclude that the focus on political power doesn't do much for ordinary blacks.



Implement the Balcerowicz Plan

 From 1989 through 1992, I had the good fortune of visiting Poland to see firsthand the rapid economic transformation the country was going through in the post-Soviet era.

Just a few hundred yards away from the Parliament, near the corner of Wiejska and Boleslawa Prusa, one could observe free market forces asserting themselves over time. The first year, the economy had completely collapsed amid crushing inflation.

Nonetheless, on that street corner I found a prototypical Polish butcher with little more than a tree stump and a cleaver, cutting the meat and selling it from the back of a dirty truck, perhaps for the first time in his life. In the Soviet days, this man might have found himself being shipped to a gulag in Siberia, but now, he was a small businessman and free to engage in commerce without fear of penalty.

This was the beginning of free enterprise in Poland. The man was happy, of course, as human nature was once again reasserting itself — that innate desire to provide for oneself and one’s family without any need for direction from a central authority.

Within three years, the tree stump had been converted into a full-range butcher shop, funded by French investors, selling every type of meat imaginable. The speed of this transformation was astounding. Each subsequent year I visited, it was akin to observing a time series of photographs detailing the progress that was being made economically in the former Soviet bloc.

It has been about twenty years since I last visited Warsaw. I have no way of knowing if the butcher shop is still there today, but what I saw was just a microcosm of what was taking place nationally.

In fact, there was a very good reason for the rapid economic miracle that took place in Poland following the fall of the Soviet Union.

Leszek Balcerowicz was that reason.

Throughout his term as deputy prime minister and finance minister from 1989 to 1991, Balcerowicz rapidly administered a wide ranging economic reform package that transformed Poland almost overnight from a communist dystopia into a relatively free market economy.

In the years that followed, Poland economically outperformed other former Soviet satellites and even Russia with average 6.6 percent annual growth. Inflation was crushed.

Today, Poland has weathered the financial crisis and even the meltdown of the Eurozone without falling into recession.

Under his plan, Balcerowicz allowed the Polish zloty to float freely on currency markets. State-owned companies were dissolved — bringing an end to Soviet-style “too big to fail”. Price controls and subsidies were abolished. The Polish central bank was prohibited from monetizing government debt. State spending was cut substantially, and more than 1 million government workers were laid off. Arbitrary taxes were abolished in favor of more uniform laws.

In 1995, after his term was over, Poland expanded on the Balcerowicz reforms by reissuing the zloty via a 10,000 to 1 redenomination. This reduced the money supply drastically.

It is striking how these policies contrast so sharply with how the U.S. and other advanced economies have responded to the financial crisis in 2008. They are the exact opposite of what we have done here.

Today, spending increases every year, the debt increases more than 8 percent annually while the central bank prints money to finance it. Fannie Mae, Freddie Mac, and Sallie Mae — comprising the mortgage and higher education lending industries — have all been nationalized.

Too big to fail was institutionalized, first via 2008 and 2009’s ad-hoc bailouts from TARP and the Federal Reserve, and then through the Dodd-Frank legislation by creating permanent bailout authority for financial institutions.

The Fed under Ben Bernanke has drastically increased its balance sheet by $2 trillion since the crisis began in Aug. 2007, and now is promising an additional $1 trillion of quantitative easing every year perhaps for the rest of our lifetimes.

Why do two men, Bernanke and Balcerowicz look at a very similar problem — i.e. a national insolvency crisis — and come to such diametrically opposed conclusions about how to solve them?

I would contend that Balcerowicz is a patriot who was looking out for the Polish people foremost, putting the national interest first. Yes, the spending cuts and other reforms were painful at first, but they set a stable foundation and by 1992, robust economic growth had been restored.

In contrast, Bernanke has put the interests of financial institutions and their solvency first, ahead of the interests of the people, which are not always the same thing. This was the protection of the investor class, and banks, who were covered by government favors, meanwhile, nationwide more than 8 million people lost their jobs.

We can compare the results of both policies with hindsight. The fact is, even after a fantastic collapse of an entire society, a national bankruptcy where even the government had fallen, Poland recovered in V-shaped fashion. Former government workers eventually found jobs in the newly created private sector.

That is not something we can claim here, where the economy is only growing at about a 2 percent rate this year so far and 23 million people cannot find full-time work, with another 5 million having given up.

The bailouts are prolonging the process of deleveraging (i.e. debt repayment and default) by financial institutions. “The longer you practice these sorts of policies, the more difficult it is to exit it. Japan is trapped,” Balcerowicz observed in a recent interview with Matthew Kaminski in the Wall Street Journal, noting that they forestall necessary fiscal reforms and balance sheet repair in both the governmental and private sectors.

As a result, ever-greater “stimulus” from the Fed is a producing less and less economic growth, proving Balcerowicz’s approach to be the only rational course.

While the attention of our media and national politicians remains fixed on the small conversations between House Speaker John Boehner and the White House, perhaps our nation should be looking at the bigger approach that Poland took when faced with a far more serious fiscal cataclysm. Failure to do so now may make it impossible to achieve in the future, consigning our nation to the never-ending economic stall pattern that Japan finds itself in.




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The Big Lie of the late 20th century was that Nazism was Rightist.  It was in fact typical of the Leftism of its day.  It was only to the Right of  Stalin's Communism.  The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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